MBC Dev., LP v. Miller, 2024 Pa. LEXIS 790 (S. Ct. May 31, 2024) (Mundy, J.).
We granted allowance of appeal to consider whether a limited partner may invoke the mandatory arbitration provision in the limited partnership agreements to compel arbitration of his challenges to a special litigation committee’s recommendation. Because we conclude the limited partnerships’ agreements incorporated the Pennsylvania Uniform Limited Partnership Act of 2016 (PULPA), 15 Pa.C.S. §§ 8611-8695, which clearly and unambiguously provides for judicial review of a special litigation committee’s recommendation, we reverse the Superior Court’s decision concluding an arbitrator could conduct the review of the special litigation committee’s determination.
DISSENTING OPINION
JUSTICE WECHT
I agree that the plain language of the Pennsylvania Uniform Limited Partnership Act of 2016 requires “court review” of a special litigation committee recommendation, and that a limited partnership agreement may not “[v]ary the provisions” of the section that sets forth the procedures relating to such committees. As the Majority aptly concludes, this suggests that arbitration of the matter is unavailable. Pennsylvania law is clear enough on the question. If that were the end of our inquiry, I would concur fully with the Majority’s disposition.
However, as Appellee argues, federal law has something to say on the matter. Section 2 of the Federal Arbitration Act declares that arbitration agreements in contracts “involving commerce” are “valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract . . . .” Appellant here makes no effort whatsoever to suggest that the agreement at issue does not involve commerce, a suggestion that would in any event be difficult to sustain given that the matter involves the business activities of a commercial entity. Appellant also does not suggest that the partnership agreement or the arbitration clause are invalid under any contract theory, such as fraud, duress, or unconscionability. Appellee, by contrast, invokes the FAA and quotes the Supreme Court of the United States’ declaration that, “[w]hen state law prohibits outright the arbitration of a particular type of claim, the analysis is straightforward: The conflicting rule is displaced by the FAA.”
